Recto pushes debt-for-disaster relief program

MANILA, Philippines – Former Sen. Ralph Recto urged the Arroyo administration yesterday to negotiate a debt-for-disaster relief program with the country’s creditors to hasten the rehabilitation of areas devastated by “Ondoy” and “Pepeng.”

“For a change, let’s make our typhoons work for us. The money we appropriate to service our debts could be spent on disaster rehabilitation instead,” he said in a statement.

Under his proposal, instead of creditor nations extending more loans to the country for reconstruction purposes, tens of billions of pesos that would be paid to them as installments for the nation’s debt would be used to rebuild typhoon-devastated communities with their agreement.

Recto’s proposal is similar to the debt-for-environment and debt-for-poverty alleviation advocacies of former Speaker Jose de Venecia Jr.

Recto, President Arroyo’s former economic planning secretary who is now a Liberal Party senatorial candidate, specifically addressed his suggestion to the Reconstruction Commission that the President has created.

Finance Secretary Margarito Teves and businessman Manuel Pangilinan jointly chair the commission, which has so far received pledges of more than $5 billion in loans and grants from the nation’s creditors.

Recto said it would take months before these pledges materialize.

Meantime, he said communities devastated by “Ondoy” and “Pepeng” badly need funds for reconstruction.

When the pledges do materialize, they will further bloat the national debt since most of them are in the form of loans, he said.

He pointed out that if there is a debt-for-disaster relief arrangement with creditors, the government could already use the agreed amounts of debt payments for its reconstruction program.

The beauty of this arrangement is that the funds would be immediately available and they will not become part of the nation’s already huge indebtedness, he stressed.

For this year, the nation is paying its creditors nearly P700 billion. In her proposed P1.541-trillion 2010 budget, Mrs. Arroyo allotted P340 billion for interest payments alone.

But senators and congressmen reduced her proposed interest payments by P65 billion, diverting the huge reduction to their pork barrel.

Recto said a debt-for-disaster relief arrangement should be used as template in securing funds in the future from the international community during calamity or disaster seasons.

“For every devastation like floods, earthquakes and drought, we get debt credits,” he said.

He cited a United Nations report naming the Philippines, Bangladesh, China, and India as among the disaster-prone nations in Asia.

The cost of devastation caused by last year’s back-to-back typhoons to farmlands and infrastructure was estimated at P38 billion. –Jess Diaz (The Philippine Star)